The European Union has put Costa Rica on a gray list, which carries financial consequences. The finance ministers of the European Union update the list of countries considered non-cooperative in tax matters every six months.
The decision was made at the headquarters of the European Union, in Brussels, Belgium. It was based on the fact that Costa Rica did not correct weaknesses in the collection of income tax. The European Union noted that Costa Rica exonerates profits obtained abroad by passive investments.
Passive investments include the purchase of a security or of a business share that produces dividends. The person does not actively participate in the activity. This facilitates double non-taxation of passive income. In other words, the person doesn’t pay tax on it in Costa Rica or the country the income originates from.
Being put on this gray list negatively affects the country’s reputation. It also carries the risk of losing foreign investment from European Union funds.
Uruguay, Barbados, Jamaica, and North Macedonia were removed from the gray list. Russia, Costa Rica, the British Virgin Islands, and the Marshall Islands were added.